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June
2008
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Climate change is one of the greatest social, economic and political issues of our time. Thousands of companies, aware of the affect they are having on the environment, are acting on their responsibilities to customers, stakeholders, staff and wider society, by seeking to reduce their carbon emissions.
The Low Carbon Board Report provides a monthly analysis on key issues facing directors as they adapt their companies for the emerging low carbon economy.
In this issue:
The Shades Of Green In Marketing Messages
Your Feets Too Big - Data Centre Emissions
Customer Services - Low Carbon Leaders?
Interview with Zubaria Lone, Vodafone Group
The Shades Of Green In Marketing
Messages
“High Performance. Low Emissions. Zero Guilt.” proclaimed the magazine ad for the luxury car-maker Lexus. It was a message that drew a different verdict from the Advertising Standards Authority, which found that Lexus misled readers by implying its product does little or no environmental harm.
Further down the ad Lexus made clear that its emissions compared favourably compared to those of competitors in a particular model class, rather than all vehicles, but the headline alone was guilt enough in the eyes of the regulator.
Verdicts like this are piling up in response to growing complaints from the public about the green credentials claimed in adverts. According to the latest figures from the Advertising Standards Authority (ASA) complaints about misleading environmental claims in advertising reached a record high last year with 561 complaints about 410 ads.
“Compare this with 2006 when the ASA received just 117 complaints about 83 ads and it is clear that consumer concern about this issue has shifted significantly. In response, the ASA is making environmental claims a key policy area in 2008 to protect consumers,” says the ASA.
As part of a programme of engagement with industry and consumer groups, the ASA launched the first of a series of seminars this month, chaired by former Cabinet Minister Chris Smith. The overall aim is to help the ASA decide where to draw the line and help the ASA Council when making judgments in future, says the watchdog.
Public expectations rise
Setbacks for the likes of Lexus haven’t hobbled the advertising industry’s bullish approach to new opportunities. Havas Media, which represents some of the largest brands worldwide – including the BBC and Nationwide in the UK – recently unveiled the results of its own research on consumer attitudes to climate change. The study, claimed to be the largest of its kind, was conducted by IPSOS in nine countries - US, UK, Germany, France, Spain, Mexico, Brazil, India and China - using more than 11,000 online interviews and 18 focus groups.
Far from looking to government for effective action on climate change, consumers expect brands to lead the way, says the research. In the UK, US, Mexico, Brazil, Germany and France, respondents felt more strongly that companies and their brands should be finding solutions, compared to the government, says Havas Media. “The research paints a picture of a world that has given up on its elected leaders’ abilities to combat the problem, with only 11% of all respondents agreeing strongly that their governments are doing enough to arrest climate change,” it concludes.
Scoring better than governments in public opinion polls may not amount to a ringing endorsement, but Havas is keen to point out the benefits to brands of being seen to take action. “This leadership vacuum presents a clear opportunity for companies and their brands to step in and take a wider role in addressing climate change. All [consumer] markets express a clear desire to see more ecologically responsible brands and believe multinationals can, and should, make a positive impact on the issue,” it says.
Mixed messages about emissions
We are already seeing signs that some brands have spotted the potential, suggests Chris Clarke, founder and director of Clarke Mulder Purdie, a public relations consultancy active in this area. “The Marks & Spencer ‘Plan A’ programme is part of a powerful message. It has allowed the company to connect with a whole new generation of people, and so plays an important part in the Marks & Spencer brand regeneration strategy,” he says.
Many companies have been eager to appropriate “carbon neutral” status, a move that Clarke has reservations about. “One of the dangers of doing this is the implicit claim about a company’s carbon footprint. Assessing the footprint is very complex, particularly for international organisations, or those with complex supply chains,” he says.
“I see three main dangers. Claiming carbon neutrality raises questions about a company’s operations that may be difficult to give convincing answers to. We’re likely to see this with the 2012 Olympics, which is even more difficult because no-one has ever done anything like that before. Second, if you publicly announce targets for becoming carbon neutral it pushes you towards offsetting, which almost certainly isn’t the most effective way. It points the organisation in a direction that isn’t as robust as it could be. Third, carbon neutrality is only part of an equation that also includes issues such as water usage, or efficiency, for example. As consumers become more sophisticated, they will ask companies what they are doing in these other areas too,” he says.
In the public gaze
The Havas Media research suggests that consumers are indeed becoming more sophisticated. In particular, the research says that awareness of the damage done by particular companies and sectors is growing, and that companies failing to act responsibly can no longer expect to hide behind generally positive perceptions of the sector in which they operate.
“As consumers become more educated in green matters, they are beginning to distinguish between companies without resorting to sector stereotypes. This is great news for brands that communicate legitimate abatement strategies and less good for those who have not yet made a start on mending their ways, as their ability to borrow credibility from more proactive peers slips away,” says the report.
Companies shouldn’t be tempted to put too much faith in dry statistics to do all the work of communicating their efforts and achievements, suggests Chris Clarke. “People are often sceptical about statistics. Think about the way we respond when we’re told by the government that police statistics show that crime is falling, for example,” he says.
Make it meaningful – and positive
A more effective approach would involve thinking about what is engaging and meaningful to customers, he suggests. HSBC has shown some initiative in this area, with its plans to open innovative zero carbon offices, and a partnership with Earthwatch to engage employees in conservation work, he says. As we move further into uncertain economic times it will be important to find ways to make the low carbon approach an attractive and positive choice, he suggests.
To have a lasting impact, communicating emissions reduction efforts must be built into the overall commercial strategy of a company, rather than applied as a cosmetic embellishment, Clarke says.
Smart companies will look to their low carbon strategies as a way to differentiate themselves from competitors, says Havas Media. “Consumers are becoming increasingly aware of who is credibly making changes and who is not, despite green stereotypes associated with different sectors. The result: green marketing strategies and good environmental practices are no longer a ‘nice to have’ for brands, but increasingly a ‘must have’ in terms of not only maintaining brand image but also in maintaining market share,” it concludes.
Key questions:
• What messages are our competitors using?
• What do our customers expect from us?
• How can our emissions reduction efforts
help our marketing strategy?
Your Feets Too Big - Data Centre Emissions
Information and Communications Technologies (ICT) have a central role to play in adapting to a low carbon economy. In the most extreme scenarios, technology could turn out to be either “hero” or “villain”, helping us to make the transition to new and leaner ways of working, or making us ever greedier for fossil fuels.
Today, the benefits delivered by ICTs are in danger of being outrun by the damage caused by their emissions. While the efficiency of most devices is improving, our gross energy demands are still rising, according to the industry body Intellect.
The Market Transformation Programme (MTP) – run by the Department for Environment, Food and Rural Affairs – estimates that electricity use by ICT equipment more than doubled between 2000 and 2005, while our growing enthusiasm for consumer electronics means that by 2020, 45% of domestic electricity will be consumed by technology products, according to research by the Energy Saving Trust.
Counting the cost of cool hardware
For companies, hosting and storage of data makes a significant contribution to the carbon footprint of its ICT operations. Indeed, according to MTP, data centres are estimated to use between 2.2 and 3.3% of the UK’s total electricity, with annual energy bills for large data centres running into millions of pounds. It is important for IT directors to know where and how savings can be made, whether their companies use third party providers or operate their own data centres.
As is widely known, a large proportion of the energy consumed by data centres – as much as 50% according to some estimates – isn’t used by server hardware at all, but for temperature control. But much of this is unnecessary, according to Ted Shann of BT Global Services. Some problems are quite easy to fix too. “There are some obvious ways to improve the efficiency of cooling systems. If you have an underfloor cooling system you can check that the ducts aren’t blocked by cables, for example,” he says.
The layout of positioning of cold air inlets and server racks can also affect efficiency. “If you have a cold aisle, make sure the cold air inlets are all facing the same way. Also, a classic mistake is to place racks too close to a fan unit, restricting the flow of cold air,” he says. More innovative approaches to cooling data centres include the use of filtered fresh air, or liquids such as a glycol which is cooled at night and piped through the building during the day.
In many cases data centres are kept cooler
than they actually need to be, Shann suggests. “Enormous savings can
be made by raising the temperature! Obviously it’s important that
this is squared off with customers and suppliers first, but in many
cases equipment that is working at 20 degrees centigrade will work
just as well at 25 or 26 degrees,” he says.
“Before you do anything like this first you must make sure you do
some analysis, to identify hot spots, for example. You can do this
with a thermal camera. When we do our own [BT’s] data centres we use
these,” he says.
Work harder but smarter
An issue that has a direct bearing on company policy – and hence the responsibility of IT directors – is more efficient procurement and use of data centre resources, says Shann. So-called virtualisation of servers is an option that is much discussed at the moment, he says. Put simply this involves running several instances of storage or server software on the same piece of hardware, ensuring greater efficiency.
“Most servers are allocated on a per project
or per application basis, with something like 10 to 15 per cent utilisation
of hardware as a result. With virtualisation this can be improved
to 60 or 70 per cent,” he says. “An interesting spin-off is the very
quick turnaround that can be achieved. Instead of going to buy a new
box – which can take a few weeks – turnaround times of a couple of
hours are achievable,” says Shann.
Virtualisation requires a cautious approach however, particularly
for critical applications that must be resilient, or are subject to
large spikes in demand.
“Many IT directors will have come across virtualisation,” says Kate Craig-Wood, a member of the British Computer Society Data Centre Specialist Group. It’s also worth bearing in mind the improved performance of new equipment, she suggests. “In the last few years we’ve seen a doubling of performance and halving of the power consumption.” Over a lifetime of three years, older technology can cost as much as in terms of energy consumption as the price of the original machine, she says.
The need for accurate data
New hardware plus virtualisation is no guarantee of optimal efficiency, says Craig-Wood. Companies tend to procure energy on the basis of the maximum capacity of their equipment, rather than what it actually needs, she suggests. “I would encourage people to measure power consumption themselves. It’s not that difficult – there are clamp-meters that go round a cable and tell you how hard a device is working.” Equipment rated at 400W may only be drawing 150W, meaning that significant amounts of energy may be wasted elsewhere that wouldn’t come to light otherwise. More generally, collecting such data can be a useful springboard for action. “If you get people to measure things, you get changes,” she says.
Independent data centres are responding quite well to the challenges, partly because electricity has always been one of their largest costs, and has a visible and obvious impact on their profitability, she says. “Problems can often arise in corporate data centres, particularly if the company is not IT-focused. There can easily be a dissociation between the IT department not talking to the mechanical and electrical department. The bill for power may not be seen by the IT guys,” she says.
Policies to make people think
“The M&E [mechanical and electrical] department
will tend to look at equipment as large resistors, and make provision
for three times the power actually needed,” she says.
Greater transparency about usage of IT resources is clearly needed.
“The technical director could consider a policy that makes users accountable.
This could involve internal billing, with a carbon bill at the bottom
– maybe that would make people think twice,” she says.
“The important actions are clear,” says Intellect. “We need to understand the energy implications of our products and processes better, we need to spread best practice through our own supply chain, we need to stimulate behavioural change, and we need to identify the best low-carbon technologies and accelerate their development and implementation. The first two actions are up to us. The last two actions have to be shared with everybody.”
Key Questions:
• What is the carbon footprint of our IT use?
• Do we know how much hardware we really need?
• Do our IT policies encourage efficient
use of energy?
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Energy in Transition – towards a low carbon future The Energy Institute’s
forum for leaders in energy thinking and technologies Energy is in a transitional phase where our ability to balance supply and demand, whilst minimising the impact on the environment, is critical to the prosperity and wellbeing of future generations. This inaugural Energy in Transition event, organised by the Energy Institute (EI) and supported by the Low Carbon Innovation Network, will focus on efforts to achieve a sustainable energy future. Highlights of the conference: Government overview of energy
demand policy International climate agenda
post 2012 Making government policy a
reality Energy efficiency commitment
Nearing mid-term technical
priorities Innovation in the energy supply
industry Home efficiency and low income
homes The role of technology in transforming
energy supply Climate change and energy security Buildings performance targets
Energy efficiency projections
for the next five years
Note: Members of the Low Carbon Innovation Network qualify for the Energy Institute Company member rate. |
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Customer Services - Low Carbon Leaders?
With the long-term shift from face-to-face contact towards online and phone-based systems, it can be argued that customer services operations have already made significant reductions to carbon footprints across all industry sectors.
What more could customer services do to reduce the emissions of their day to day operations? And could they take leading role in shaping the wider emissions reduction strategies of the organizations they serve?
Companies such as BT are addressing the first of these questions by exploring the possibilities of low carbon call centres. “The main BT Contact Centre in Glasgow is a good example, it was purpose-built with a large atrium to minimise the requirement for artificial lighting,” says the Customer Contact Association (CCA), a trade body representing the UK industry.
There are some obvious efficiencies to be gained by managing energy use more effectively. For example, Vodafone aims to reduce the day-to-day energy consumption of its offices and call centres by around 10% by using air conditioning systems and lighting more carefully.
An “on the spot” survey of senior managers
and executives attending the 2007 CCA Annual Convention found that
53% of respondents already have a green policy in place, though many,
unprompted, expressed concerns about the quality of the current policy.
Perhaps surprisingly, nearly a quarter didn’t know if their organisation
had such a policy.
Some 41% had a named individual responsible
for green issues, while 26% had no such person and 33% were uncertain
if such a role existed in their business. Looking ahead,
the survey indicates that green issues are increasingly likely to
impact on future purchasing decisions, with 44% planning to “go green”
in their contact centre within the next 12 months and a further 20%
in the next three years.
From tender processes to ‘Generation Y’
The call centre industry will soon see carbon emissions become part of agreements with some clients, suggests Natalie Portman, managing director of Calcom Group, a provider of customer services operations for large companies. “This is something we’re just starting to see as part of the tender process for these large companies,” she says. “Companies may be asked if they have a low carbon policy in place as part of wider questions about environmental policies, and what their strategy is for engaging with employees to reduce emissions in future,” she says.
At present, many corporate call centres don’t have carbon reduction policies tailored specifically for them, being subject to wider corporate policies, says Portman. “This may change, because in other areas they do. For example, companies often have human resources specialist to work with its call centres, or IT specialists, for example,” she says.
In future, call centres are likely to look more closely at carbon reduction policies as part of their strategy for attracting and retaining staff, Portman suggests. “One of the things we’re seeing is the attempt to improve staff retention by encouraging them to become more aware of their responsibilities to the communities they work in, and helping them to participate more. I’ve recently been doing some research on the so-called ‘Generation Y’, and this suggests that increasingly employees will expect this kind of involvement, and new ways of working,” she says.
Changing employee behaviour could have a significant impact on a call centre’s carbon footprint. Recent estimates suggest that the UK's contact centre professionals could be generating more than 1 million tonnes of carbon dioxide emissions every year through the daily commute to and from work. “One of the striking things about many call centres is the size of the car park. Companies could think about encouraging greater use of public transport, or a company bus if public transport is difficult,” says Portman. Staff may also feel safer in their own cars, and companies could consider improving security arrangements to make alternatives more attractive, she says.
A more radical alternative is to consider flexible working arrangements, allowing staff to work from home, for example. “There are some situations where that really isn’t an option – where staff are hugely dependent on specialist technology, or for security reasons for example,” she says. Industry estimates put the number of outsourced home-based call centre staff at 47,000 worldwide, which is expected to rise to 224,000 by 2012. In the UK, the Automobile Association is a significant user of home-working call centre agents, with around 300 home-based agents taking calls from motorists and dealing with insurance quotes.
The pros and cons of flexible working
Yet more than 50% of UK centres refuse to consider the option of home-working according to research carried out in 2008 by the Professional Planning Forum, an independent industry body. When asked why this was so, the responses highlighted concerns about managing staff effectively and efficiently, and staff ability to focus adequately on work. “Long time to fully train”, and “Requests for hours within the ‘school run’, poor evening cover delivered” were typical, says the research.
By contrast, parts of the public sector have a track record of being more open to flexible working. This proved to be a key advantage for the contact centre of Gloucestershire County Council during the catastrophic floods of July 2007. The contact centre, made up of around 70 operators plus managers, received about 2,000 calls on the first day of the floods alone, according to manager Glynis Morris.
Rising water levels forced the contact centre staff to evacuate to buildings in Chippenham and Worcester, and even the local radio station, Radio Gloucester. Other staff continued working from home. Having the infrastructure for flexible working helped the contact centre to be one of the few parts of the council to continue working throughout, says manager Glynis Morris.
Buoyed by its success Gloucestershire’s customer services arm has become a key player in the council’s emissions reduction strategy, providing advice to other council departments on how to manage flexible working, and manage the peaks and troughs of customer demand more efficiently, she says.
Key Questions:
Are call centre staff properly briefed about our low carbon policies?
How can we use customer service data to improve our overall efficiency?
How are we helping our call centre staff reduce their emissions?
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Interview
with a Low Carbon Leader
Zubaria Lone, Vodafone Group
Zubaria is an environmental sustainability and corporate responsibility professional. She has 15 years consulting and industry experience, with Courtaulds, Enviros Aspinwall, Ernst & Young, Orange/France Telecom and Vodafone Group. Working with senior management, trade associations, regulators, local and national government, EU, UN bodies, she is used to aligning corporate and social responsibility programmes with board level business objectives. She has advised energy, financial services, media, pharma, chemical, engineering and telecomms companies about sustainability and climate change. Zubaria has also served on several industry committees, and written or contributed to several key papers.
What projects are you currently working on?
"Acting as a responsible business is one of our six strategic goals and therefore limiting our contribution to climate change is a clear priority for us. The greatest amount of energy is used in the maintenance of our network therefore my aim is to ensure that it runs as efficiently as possible. To achieve this I work on a number of initiatives across the business including establishing realistic energy targets for our operating companies, establishing an audit procedure in order to monitor compliance, working with network suppliers to improve the energy efficiency of our new equipment and adopting higher standards for our air conditioning equipment."
What is your personal, proudest "green" achievement?
"I think my biggest green achievement is to be part of a team which is able to guide a business along an environmental path which is right for them and their sector. For example at Vodafone we have established a recycling initiative across all our markets. Given we have 16 local operating companies across varied geographies and cultures this is a real achievement. It is aimed at staff and customers and is a handset recycling initiative. We recycle paper from our offices; 97% of our network waste was recycled in the 2007 financial year."
What are the key ingredients of a successful low carbon initiative in any sector?
"I think it is important to understand where you start from and what it is possible to achieve. At Vodafone our first challenge was to produce an audit of our activities across all our markets so that we can monitor improvement. It is also important to prioritise so we first looked at our energy emissions and are continuously working on how to reduce these. We are also exploring ways in which to increase our use of renewable energy. Finally we are looking at ways in which our products and services can help our customers reduce their impact on the environment."
What are the biggest challenges you face in your role and how do you deal with them?
"The biggest challenge I face is how to get people to act without feeling guilty. I think the view here is that our approach to encouraging people to care more about the environment should be more positive and empowering rather than negative and guilt inducing.
"I am confident that we can all make a difference to the environment and think it is possible to drive positive change so people can feel empowered to work together on this issue."
How do you encourage customers and staff to become more environmentally conscious - how do you crack the 'hardest nuts?'
"We believe in sustained communication. We have for example been recycling phones in the UK since 2002 and any customer who has come into our stores or has a contract with us will have received information on how to recycle their phone. We also think you have to communicate with people in a way which is accessible to them
"For example, in the UK we have just launched a recycling initiative with Global Cool. This uses celebrities such as actress Sienna Miller to help communicate the environmental message and simple actions individuals can take which, when taken as a whole, will reduce the amount of carbon emissions in the atmosphere. We have used Sienna to promote our handset recycling initiative in a number of ways through print material, on all our recycling bins in store and for PR purposes. These celebrities are key to driving awareness in our core customer group, which is aged 18 - 28.
"Internally we work hard to ensure that awareness about the environment is maintained. We have regular internal campaigns, the most recent of which is a climate change intranet site which helps people work out what they can do to limit their personal emissions The site explains the issues around climate change and it also has a online quiz which helps you as an individual measure your carbon footprint and then provides suggestions on how to reduce your impact - its called the Climate Challenge. The suggestions are fairly simple to implement, eg energy efficient light bulbs, advice about insulation of your home and driving. The intranet site also outlines what we as a company are doing to reduce our carbon emissions."
What emerging trends do you predict?
"Climate change is clearly becoming more main stream. It is no longer an issue peripheral to the business and therefore I would imagine we will see the continued development of products and services as companies start to respond and help their customers to respond to the environmental challenge."
What advice would you give to someone starting out in a similar role to yours?
"Whatever else you do make any
recommendations you have relevant to the business you work in."
Low Carbon Board Report ~ July Issue
Topics for next month's articles:
- Planning for a low-carbon Olympics
- The latest thinking from the CBI
- Leadership training - what is available?
- Viewpoint - the automotive industry
Please send suggestions for future articles, or any other comments, to editor@low-carbon-report.com
Previous Board Reports
Please click on the links below to read previously published articles.
May Issue
Responsible
Procurement Is Good For Business
Counting
The Cost Of Carbon - New Risks And Opportunities
The
New Drivers Of Low Carbon Transport
Shades
Of Green In The Energy Supply
Interview
with Dr Martin Gibson, Programme Director, Envirowise
April Issue
How
Green Is My Workplace?
Strength
In Numbers - Low Carbon Communities
Held
To Account - Shareholder Activism
Working
Together - Public Sector Partners
Interview
with Stephen
Brown, Sustainable Development Manager at Yorkshire Forward
March Issue
From
Green Overheads To Green Assets
Drawing
On Best Practice - The Case For Consultancy
Investing
In Low Carbon - Investing In The Future
The
Ingredients Of A Strategic Approach To Energy
Interview
with John
Elkington, Founder and Chief Entrepreneur, SustainAbility
February Issue
Moving
To A Low Carbon Economy
Motivated
Staff Make Lighter Footprints
Carbon
Offsets - Some Inconvenient Truths
International
Standards: Singing From The Same Hymn Sheet?
Interview
with Nicky
Major, Director of Corporate Responsibility, Ernst & Young
January Issue
The
Climate Change Bill: Transforming The Business Landscape
Why
Is Low Carbon An Issue For The Boardroom?
Low
Carbon Leader: The Champion In The Boardroom
The
Hunt For Carbon: Links In The Chain
Interview
with Simon Pearson, Head of Internal Environmental Management at the
Environment Agency